Assuming the Federal Reserve makes an open-market purchase of a govern

Assuming the Federal Reserve makes an open-market purchase of a government security worth $10,000 . By writing a check to pay for this security, the Federal Reserve

a. reduces the balance of its assets by $10,000.
b. reduces the balance of its liabilities by $10,000.
c. neither reduces the balance of its assets nor the balance of its liabilities by $10,000.
d. creates a new $10,000 liability against itself.
e. both c and d are correct.

ANSWER

E